Posted May 8, 2023

Distribution Solutions Group grows adjusted revenue 28%

Distribution Solutions Group, Inc. announced first quarter GAAP revenue was $348.3 million, an increase of $194.2 million or 126.0%, which included $38.9 million of additional revenue from companies acquired in 2022 other than Lawson Products.


  • Non-GAAP adjusted revenue, which in the first quarter of 2022 includes the pre-merger revenue of Lawson Products for comparison, increased 28.1% or approximately $76.3 million. This improvement was driven by strong organic growth of 13.7% plus revenue from companies acquired in 2022 (other than Lawson Products).
  • Reported operating income increased by $13.7 million from the prior year period to $16.7 million or 4.8% of GAAP revenue. Non-GAAP adjusted EBITDA increased by 73.6% from the prior year period to $39.4 million or 11.3% of revenue.
  • Diluted income per share was $0.28 for the quarter compared to a diluted loss per share of $0.25 in the year-ago quarter. Non-GAAP diluted earnings per share was $0.52 in the first quarter 2023 compared to $0.00 for the same period a year ago.
  • On March 30, 2023, the company entered into a Stock Purchase Agreement for the acquisition of HIS Company, Inc., a Texas corporation (“Hisco”), for $269.1 million in cash payable at closing, with a potential additional earn-out payment of up to $12.6 million and $37.5 million, payable in cash or DSG common stock, in potential employee retention payments. 

“I am excited to report the continued strong financial performance of DSG. During the first quarter, revenue and EBITDA margin improvement continued, with adjusted revenue growth of 28%, fueled by organic growth of 13.7%, and adjusted EBITDA expansion to $39.4 million, or 11.3% of revenue," said Bryan King, CEO and chairman of the board. "This margin profile represents a 300 basis point improvement compared to one year ago as our execution has tracked our vision for why we formed the DSG platform a year ago. We remain confident in our prospects and continue to focus on generating shareholder value by driving sales growth, improving profitability and creating incremental cash flow through solid performance.

"We continue to watch the demand environment, and although certain end markets have moderated somewhat, we anticipate continued year-over-year revenue and profitability expansion as 2023 progresses with a focus on organic growth, strategic acquisitions and improved operational efficiencies. We believe that our asset light business model, combined with our focus on growing operating cash flows, positions us well to enhance shareholder value in 2023 and beyond.

"We were also thrilled to recently announce our agreement to acquire Hisco, a leading distributor of specialty products serving industrial technology applications, which is expected to close by the end of the second quarter," Kind continued."We believe that combining with Hisco will strategically accelerate our growth trajectory for all of our operating companies, with expansion in both customers and product offerings, coupled with better scale and incremental cost synergies."